Sixth Consecutive Season Exceeds Expectations: Roku (ROKU.US) Revenue Hits $1.5 Billion, Beats Forecasts; $22 Billion Acquisition Remains Unresolved

According to Zhitong Finance APP, in the early hours of November 3 Beijing time, streaming media platform Roku (ROKU.US) released its third-quarter 2026 earnings report after the U.S. market closed on Monday. The financial report shows that the company’s earnings per share for the quarter were $1.20, significantly higher than the market consensus of $0.57; net revenue was $1.5 billion, also above analysts’ expectations of $1.41 billion, representing a year-on-year increase of more than 20%. This marks the sixth consecutive quarter that Roku has beaten earnings expectations, but the market's attention is not just on the results themselves—in the context of the pending $22 billion acquisition by Fox Corporation, this season's financial report serves more as a comprehensive test of “Roku’s independent value.”

Consistently beating expectations, political ads and a major redesign drive growth

This quarter, Roku continued the strong momentum it has shown over the past year. As a comparison, in the previous quarter (Q2), the company recorded a record quarterly net profit of $164 million (a year-on-year surge of over 1,400%), platform revenue grew 25% to $1.22 billion, including a 25% increase in advertising revenue to $673 million and a 26% increase in subscription revenue to $548 million. Total streaming hours across the platform reached 37.9 billion hours (+7%).

Entering the third quarter, multiple favorable factors converged: With the U.S. midterm elections approaching, political advertising spending is expected to ramp up from the end of Q3 through Q4, while third-party DSP channels have already handled about 75% of in-stream video ad placements, making it easier for campaign ads to access Roku inventory. At the same time, Roku’s so-called “largest redesign in a decade” of its new main screen was completed and rolled out nationwide at the beginning of Q3. Official data indicates improved user retention in the early phase, which may reduce the cost of acquiring and retaining streaming households.

However, there are also one-off factors and pressure points within the earnings: In Q2, the devices segment’s gross margin benefited from a $37 million tariff refund (excluding which, gross margin would have been negative), and this benefit will not recur; distribution costs for Roku-branded TVs will be mostly recognized in the second half of 2026, while increased shipments will also push up sales and marketing expenses; tight DRAM and flash memory supply presents cost-side risks. CEO Anthony Wood previously commented, “As memory prices rise, our materials cost advantage relative to competitors will actually expand”—the Roku operating system requires significantly less memory and flash than competing platforms.

Fox’s $22 billion acquisition: The real focus of the financial report

This report is the second quarterly report since Fox announced its acquisition of Roku on June 15. According to the agreement, Fox will acquire Roku at $160 per share ($96 per share in cash plus 0.9693 shares of Fox A-class common stock), giving the deal an enterprise value of about $22 billion, expected to close in the first half of 2027. The merged company will combine Fox’s sports and news content (NFL, MLB, NASCAR, World Cup, Fox News, etc.) and Tubi, with Roku’s connected TV platform, The Roku Channel, and over 100 million global streaming households, making it the third-largest TV media force in the U.S. by viewing share.

However, the prospects for the deal are still uncertain: The U.S. Department of Justice (DOJ) has extended its antitrust review of the transaction, and the deal cannot close until the review is complete. As a result, Roku management has stopped issuing performance guidance and no longer holds earnings calls; all information this quarter is shared solely through the shareholder letter. Ahead of the financial report, Roku stock was trading at about $157, up roughly 45% year-to-date, consistently hovering below the $160 offer price—the market is pricing in the possibility of deal failure or regulatory hurdles.

Therefore, the significance of this quarter’s report goes beyond usual performance comparison: If the deal proceeds smoothly, the offer price of $160 caps the upside; if the deal falls through, Roku’s independent fundamentals—its consistently above-expectations profitability and the strong momentum in connected TV advertising—will become the key factors determining the downside limit for the stock price. By this measure, the significant outperformance in both EPS and revenue this quarter undoubtedly provides strong support for that “downside limit.”